Why Institutions Call Bitcoin a – Yet 70% Still See It as Undervalued

Bitcoin’s price has been under pressure lately. Big investors, or institutions, are finally saying what many feared: we are in a . But here’s the twist. A new survey shows that 70% of these same institutions believe Bitcoin is still . Even more surprising, most have kept their holdings the same or even bought more since October.

This seems like a big contradiction. How can smart money call it a but act like Bitcoin is a bargain? The answer lies in how these pros think about markets. They separate short-term pain from long-term value. Let’s break it down step by step.

The Survey That Shook the Crypto World

A recent global survey by top market researchers asked institutions about crypto. Key findings:

• 1 in 4 (25%) say crypto is now in a .
• 70% say Bitcoin’s price is .
• Most held or increased their Bitcoin exposure after October’s big drop.

This tells us institutions are cautious right now. They see tough times ahead in the short term. But they are not running away. Instead, they focus on Bitcoin over riskier altcoins. Why? Altcoins crashed hard in October due to high leverage. Bitcoin held steady, with its market share rising slightly from 58% to 59%.

Bitcoin acts like the safe haven in crypto. When times get tough, you sell the weak stuff first but keep the strong one.

Label vs. Long-Term Value

Institutions use “” to describe the current setup. It means:

• Defensive positioning.
• Selective liquidity.
• Choppy or down-trending prices.

But “” is different. It’s about Bitcoin’s future. They look at:

• Growing adoption.
• Fixed supply (scarcity).
• Better market rules.
• Friendly policies.

Bear markets often clean out weak hands. They set the stage for big growth later. Institutions know this from history.

Derivatives Tell the Real Story

Look at trading tools. Perpetual futures took a hit. Their leverage dropped to just 3% of crypto market cap (minus stablecoins). Traders got burned by forced sales.

But options trading exploded. Bitcoin options now have more open interest than perpetuals. Why? Options let you stay in the game with protection. The put-call skew is positive for 30, 90, and 180 days. This shows fear of downside but willingness to hold long positions.

Institutions shifted to safer bets like options and basis trades. These give upside potential without liquidation risk. Smart move in a .

On-Chain Data Backs It Up

Blockchain data shows the mood. Entity-adjusted NUPL (a sentiment gauge) fell from “Belief” to “Anxiety” in October. It stayed there. Not panic selling, just cooling off.

Coin movement: Short-term Bitcoin (moved in 3 months) rose 37%. Long-term holders (over 1 year) dropped 2%. This looks like distribution. Big players sold into strength to de-risk. Now, the market seeks new buyers who can hold without constant support.

Bitcoin stands out. It’s the only crypto asset that can handle big money flows without retail hype.

Institutions see Bitcoin as a store of value and macro hedge, not just another token.

Cycles vs. Macro: The Big Shift

Old crypto wisdom says four-year halving cycles rule prices. Institutions disagree. It’s a guide, not gospel. Halvings matter for sentiment, but macro factors like liquidity and rates drive real moves.

Evidence? Only four halvings so far, mixed with big events like QE and COVID cash.

Current macro looks okay:

• December CPI at 2.7%.
• Atlanta Fed sees 5.3% GDP growth Q4 2025.
• Fed may cut rates 50 bps.
• Jobs cooling (584k added in 2025 vs. 2M in 2024), thanks to AI.

A global M2 money supply index leads Bitcoin by 110 days with 0.9 correlation. More liquidity = higher BTC.

Outlook favors big caps like Bitcoin. Small caps still hurt from October.

What Could Break This View?

Institutions aren’t blind. A single dip won’t change minds. But a combo could:

• Macro liquidity dries up.
• On-chain accumulation stops.
• Long-term holders sell into weakness.
• Institutional demand fades.

Until then, they stick with Bitcoin as the durable bet.

Why This Matters for You

If big money stays in, Bitcoin could rebound strong. ETFs, better derivatives, and policy shifts change the game. The four-year cycle is now secondary to real-world money flows.

For retail investors: Follow institutions. Cut altcoin risk. Use defined-risk tools. Think long-term value over short-term noise.

In a , patience wins. Bitcoin’s tag suggests the bottom is near – if macro holds.

2026 Outlook: Bullish on Bitcoin?

Expect more institutional flows. Favor quality over speculation. Watch liquidity and Fed moves closely. Bitcoin dominance could rise further.

The paradox makes sense: today, tomorrow.

Stay informed. Crypto evolves fast.

Key Takeaways:

1. Institutions see regime but love Bitcoin’s value.
2. Shift to options shows smart defense.
3. Macro liquidity trumps cycles.
4. Hold steady – distribution phase may end soon.